Fiat Pushes Work Ethic at Italian Plant

The car maker asks workers to be more devoted to their jobs, mirroring a larger effort to improve competitiveness.

LIZ ALDERMAN

POMIGLIANO D’ARCO, Italy — In a country where Fiats line the streets, Italians have long clung to a revealing proverb: as Fiat goes, so goes Italy.

Fiat’s efforts to make its workers more productive at a plant just north of Naples are testing that maxim as never before, and may signal whether Italians are willing to embrace the kind of change needed for Italy to skirt financial ruin and be more competitive with the countries of Northern Europe and the rest of the world.

Even some workers here in Pomigliano, Fiat’s lowest-producing plant, complain of ingrained bad habits, citing peers who call in sick to earn money while working another job or skip work with a fake doctor’s note — especially when the local soccer team is playing.

Now, fresh from rescuing Chrysler in the United States, Sergio Marchionne of Fiat is pushing these workers to be more devoted to their jobs, mirroring a larger effort by the government to improve Italy’s competitiveness and reduce its debt through austerity measures.

But shifting a culture toward work and closing the divide with Italy’s northern neighbors won’t be easy. Embedded for generations here — and on other parts of Europe’s often-sweltering southern rim — is a lifestyle that values flexibility for workers.

To some, Fiat is drawing the curtain on a humane working life.

“He wants to impose American-style standards,” Nello Niglio, a factory worker, said of Mr. Marchionne’s requirements to work longer hours and cut back on absences. “But too much work is going to kill our workers.”

Much is riding on Italy being able to persuade its people to change their work habits if their financial futures are going to improve, both individually and as a nation.

Even if Italy escapes the kind of sovereign debt crisis that engulfed Greece earlier this year — and that is not certain — it has a mountain of debt that it needs to trim in coming years. While its deficit is low, at 5 percent of gross domestic product, debt is 115 percent, the same as that of Greece. To reduce it, Italy needs more robust economic growth to stoke government revenue.

A turnaround for Italy, which sported the undesirable “sick man of Europe” title until last year, becomes more crucial as Europe stumbles toward a two-track recovery in which Italy, Greece and other southern countries lag Germany, France and more productive economies to the north. Recent forecasts have reduced growth projections for the southern tier.

Economists fear that if unchecked, the financial divide that has long existed between Northern and Southern Europe could lead to instability in the 16-nation euro club over time.

“The fact that you have a great divide between the north and the south is penalizing in the sense that if part of a country is underperforming it can hurt the macroeconomic structure as a whole,” said Davide Stroppa, global economist at the Italian bank UniCredit. “If you have a large part of the euro zone underperforming, it’s clearly a problem.”

Prime Minister Silvio Berlusconi is tackling the issue in an austerity package introduced in May that includes tying public salary to productivity gains, raising the retirement age and slashing government spending. While Italians are not denying that austerity is necessary, an estimated one million people went on strike last month to protest the latest squeeze on workers.

In Pomigliano, as elsewhere in Italy, workers acknowledged in recent interviews that the country must recalibrate. “The competitiveness of the entire world is changing,” said Gennario Nacco, a 21-year veteran of the Fiat plant.

The factory, which produces Alfa Romeos, is in many ways an extreme example of Italy’s woes. The 5,200 employees have been operating the plant at 32 percent capacity for the last two years, since demand collapsed during the economic crisis.

Keeping the plant open would seem to make little economic sense. But Fiat, which generates nearly half the region’s economic activity, faced political pressure to safeguard the livelihood of about 15,000 families in a poor area gripped by organized crime. Unemployment and growth rates here are among the worst in the country, while productivity has been about 20 percent lower.

Mr. Marchionne, who engineered a stunning turnaround of Fiat in 2006, pulling it from the brink of bankruptcy, called on employees to radically alter their work ethic to compete in the global marketplace. If they did so, he vowed to spare the plant from closure and shift production of the popular Panda car back from Poland.

“The less they work, the happier they are,” observed Vittorio di Giola, owner of the Caffetteria Vicky, a favorite haunt of Fiat workers on the Viale Alfa Romeo, Pomigliano’s main drag.

That view was acknowledged by some workers, union officials and even the town’s mayor, Raffaele Russo. “There are those who don’t miss a chance to miss work,” Mr. Russo said.

Just last month, Fiat erected large television screens inside the factory when Italy played in the World Cup to encourage employees to come to work, said Mr. Nacco, the longtime worker there. Still, some people did not show up. “And Fiat was paying us to watch the game,” he said.

Yet for every worker resisting the shift, many more have decided that having a job is better than unemployment. After months of tension, 63 percent of the employees voted in June to accept Fiat’s plan, which would penalize employees for abusing sick days, give them shorter lunch breaks and forbid them from striking during periods of high demand.

In turn, Fiat would invest more than 700 million euros ($905 million) in the factory, which would operate 24 hours a day, six days a week. A third daily shift would double output to 280,000 cars annually by next summer.

Fiat declined to make Mr. Marchionne or other executives available to discuss the situation.

From the perspective of Mr. Niglio and other members of the union known as FIOM, the only one of five unions to vote against the plan, Mr. Marchionne is marching Italy on a path toward China.

“There, they work super shifts that lead to increased suicide rates,” he said, “and workers are no longer humans, but machines.” He said Fiat was crushing their right to strike, and cautioned that longer hours would diminish the quality of work. Absenteeism, he insisted, has not been a problem in the factory for years.

Many Fiat workers, however, said they had long complained to managers about employees who regularly missed shifts, a problem that they said persisted today.

“When one person is missing, it slows down the whole group and everyone has to pick up the slack,” Mr. Nacco said. “The production of 200 cars, for example, is slowed to 160 if a person is gone. Imagine when this is multiplied across the factory.”

Absenteeism has fallen to about 3 percent from about 30 percent a couple of years ago, said Crescenzo Auriemma, the secretary for the region’s umbrella group for auto unions. Managers are cracking down nonetheless, sending a doctor to the homes of employees who do not show up for work.

Mr. Nacco, along with other people who declined to be identified by name so as not to escalate tensions at the plant, said resistance would not disappear overnight. But he is hoping the new steps will guarantee a future for the factory that employed “my father, my uncles, my nephew, my sister, — and hopefully, one day, my son.”

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